Introduction to Rethinking Capitalism

One critical result of the decline in investment is that productivity growth has also been weak relative to historic trends. In the decade prior to the crisis, labour productivity growth was below trend in almost all G7 countries, in some continuing a thirty-year decline. Since the financial crisis it has fallen further in most developed countries, including the US, Japan, France and the UK. At the same time there appears to be some evidence that rates of productivity-enhancing innovation have also slowed down.

Across advanced economies, the share of GDP going to labour fell by 9 per cent on average between 1980 and 2007, including 5 per cent in the US (from 70 to 65 per cent), 10 per cent in Germany (from 72 to 62 per cent) and fully 15 per cent in Japan (from 77 to 62 per cent).